India’s year-to-date M&A deal value reaches record high

New Delhi: The merger and acquisition (M&A) deal value in India has reached a record high of $44.2 billion so far this year and the outlook for the coming months looks bullish, reports PTI quoting a report.

According to a report by merger market, a M&A intelligence service provider, M&A activities in the country generally saw significant improvement in the past three quarters as 183 deals worth $44.2 billion were announced, up 24.5% in volume terms and 312.9% in deal value from a ago.

"We expect to see a lot more strategic activity in India as private equity players shy away from the sky-high valuations being demanded by shareholders," merger market Asia Pacific deputy editor Anjali Naik said.

Going forward, Ms Naik said the consumer, travel and hospitality sector may see a large number of M&A deals and India may trade into newer territories in the coming months.

"We are also seeing India forge acquisitions in new countries - such as Sri Lanka, given the proximity and cultural ties, and Australia - given their high quality resources and tech-savvy market," Ms Naik added.

The Indian government's auction of third generation (3G) and broadband wireless access (BWA) spectrums worth $11.009 billion and $5.473 billion, respectively contributed significantly to the deal tally.

A sector wise analysis shows that the technology, media and telecoms sector accounted for 47.3% of the total M&A deal value till date, while, the energy, mining and utilities sector, was the second most-active sector, as it contributed 26.3% in deal value for the first three quarters of 2010, the report said.

Rothschild topped the financial advisors league table In the first three quarters of 2010, as it advised on M&A transactions with a total value of $27.4 billion, while, Ernst & Young topped the deal count financial advisers table by advising on 18 deals, the report said.

Some of the announced deals so far this year include the $10.7 million Bharti-Zain deal, Vedanta's 60% stake buy in Cairn India worth $9.1 million, the $3.7 million Abbott Laboratories-Piramal Healthcare deal, the report added.


Personal finance Tuesday

IDFC extends closing date for bonds issue by 4 days; HDFC Bank increases rates on fixed deposits by 50 basis points; Principal MF floats Principal Pnb Fixed Maturity Plan-91 Days-Series XXIV; Karur Vysya Bank to launch point of sale services;

IDFC extends closing date for bonds issue by 4 days

Infrastructure Development Finance Company Ltd (IDFC) has extended the closing date for its bond issue by four days to 22nd October. The issue, which opened on 30th September, was initially to close on 18th October.

In 2010, the government introduced a new Section 80CCF under the Income-Tax Act to provide for income tax deductions for subscription in long-term infrastructure bonds. These bonds offer an additional window of tax deduction of investments up to Rs20,000 for the financial year 2010-11. This deduction is over and above the Rs1 lakh deduction available under Sections 80C, 80CCC and 80CCD read with Section 80CCE. Infrastructure bonds help in intermediating the retail investor's savings into infrastructure sector directly.

HDFC Bank increases rates on fixed deposits by 50 basis points

HDFC Bank has increased interest rates on fixed deposits by 50 basis points on different maturities. The Bank has taken this step a week after it raised its lending rates. Deposits having tenor of one year to one year and 15 days will now get 7% interest while those maturing in two-three years would get 7.25%. Deposits having maturity of 30-45 days will now give 4% interest as against 3.75% earlier. Interest rate on 91 days to less than six months will go up by 25 basis points at 5.5%.
The Bank has revised its lending as well as deposit rates owing to the policy rate hike by the Reserve Bank of India in the second quarter review of monetary policy in September.

Principal MF floats Principal Pnb Fixed Maturity Plan-91 Days-Series XXIV

Principal Mutual Fund has launched Principal Pnb Fixed Maturity Plan-91 Days- Series XXIV, a close-ended debt scheme. The investment objective of the Scheme is to build an income oriented portfolio and generate returns through investment in debt/money-market instruments and government securities. The Scheme has no intention to invest in securitised debt and foreign debt instruments.

The Scheme offers growth and dividend options. During the new fund offer (NFO), the units will be offered at face value of Rs10 per unit. The Scheme opens on 12th October and closes on 13th October. The exit load for the Scheme is nil. The minimum investment amount is Rs5,000. The minimum target amount is Rs35 crore.CRISIL Liquid Fund Index is the benchmark index for the Scheme. The Scheme will be managed by Shobit Gupta.

Karur Vysya Bank to launch point of sale services

Karur Vysya Bank (KVB) has signed a memorandum of understanding (MoU) with Corporation Bank to launch point of sale (PoS) services.

MRL Posnet is the service provider for implementation of the PoS services. The company will help KVB by way of entering agreements with merchants, placing the PoS machines at the merchant outlets, besides taking care of the settlement and reconciliation processes. Prizm Payment Services will provide the switching solution for the transactions.

KVB recently increased its benchmark prime lending rate (BPLR) and base rate by 50 basis points. The Bank's current lending rate is 14% as against 13.5%. Also, its base rate has increased to 9% from 8.5%.


FM meets financial regulators to work out framework for FSDC

New Delhi: Finance minister Pranab Mukherjee today met financial sector regulators, including Reserve Bank of India (RBI) governor D Subbarao and Securities and Exchange Board of India (SEBI) chairman C B Bhave, to work out a framework for the Financial Stability and Development Council (FSDC) - a body which will deal with inter-regulatory issues, reports PTI.

"They (finance ministry) have asked for reactions from all the regulators which we have given in writing earlier. Today the finance minster held a meeting to discuss our reaction on the discussion paper," RBI governor D Subbarao told reporters after the meeting.

The RBI is believed to have expressed reservations on the proposal saying that the council, which will be akin to a super-regulator, might dilute its autonomy.

Besides Mr Subbarao and Mr Bhave, the meeting was attended by Insurance Regulatory and Development Authority (IRDA) chairman J Hari Narayan and Pension Fund Regulatory and Development Authority (PFRDA) chairman Yogesh Agarwal. Finance secretary Ashok Chawla was also present.

In the Union budget, Mr Mukherjee had proposed to set up FSDC with the explicit intention of strengthening and institutionalising the mechanism for maintaining financial stability.

The minister recently at New York had said, "Without prejudice to the autonomy of regulators, the council would undertake macro prudential supervision of the economy, including functioning of large financial conglomerates, and address inter-regulatory coordination issues. It will also focus on financial literacy and financial inclusion."

Today's meeting, according to Mr Subbarao, "was very constructive. We gave our suggestion. He (the minister) said he will consider them and the finance ministry will respond."


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